Cryptocurrency exchange Kraken and on-chain asset manager Maple have launched an onchain warehouse financing facility for crypto-collateralized loans. The parties moved a structure widely used in traditional credit markets in corporate digital asset loans to the blockchain-based system.
Basic elements of the structure
The facility will support Kraken’s over-the-counter lending activities through insolvency-insulated special purpose entity and USDC-denominated financing, according to a statement on Thursday. In this model, Maple provides senior financing while Kraken retains its share in the transaction. Thus, it was reported that Kraken aims to grow its corporate loan business without adding additional capital to its balance sheet.
Mini glossary: A special purpose entity is a separate legal structure established for a specific transaction. The insulated model against bankruptcy aims to legally separate the relevant assets from the possible bankruptcy process of the parent company.
Maple stated that this structure offers corporate lenders access to over-collateralized senior risk collateralized by Bitcoin and Ether. The company also emphasized that collateral movements and loan performance can be monitored on-chain. Maple is known as a platform operating in the field of tokenized lending.
Maple explained that the structure offers corporate creditors access to over-collateralized senior risk, backed by Bitcoin and Ether, and that collateral and loan performance can be tracked on-chain.
Kraken-affiliated companies will undertake the origination, sale and operational monitoring of loans. The underlying securities will be held by Kraken Financial, a Wyoming licensed special purpose depository institution. Zaria, an independent special purpose entity manager, will handle the management side of the facility. The parties did not disclose the size and financial conditions of the facility.
Growth in the tokenized credit market
According to RWA.xyz data, the tokenized credit market has grown from approximately $1.87 billion to over $6.2 billion in the last year. It was stated that Maple is the largest platform in this field and manages approximately $1.4 billion in tokenized credit assets.
| Metric | Value |
|---|---|
| Tokenized credit market | $6.2 billion+ |
| One year ago level | Approximately $1.87 billion |
| Maple’s tokenized credit assets | Approximately $1.4 billion |
The announcement comes at a time when the crypto lending industry is trying to restructure after the market crash in 2022. After the collapse of lending platforms such as Celsius and BlockFi, companies turned to re-expanding corporate lending channels and blockchain-based lending infrastructure.
Parallel steps and weak links in the sector
In May, Ripple secured a $200 million credit line from investment manager Neuberger Berman to expand the credit capacity of its institutional prime brokerage business. It was announced that this resource will be used to support margin loans and similar products for hedge funds, trading companies and other institutional customers.
As the crypto lending market reshapes after the 2022 crash, companies are expanding corporate lending capacity and blockchain-based lending infrastructure.
That same month, Bernstein analysts predicted that tokenized credit could grow into an accessible $4 trillion market if blockchain-based loans expand beyond niche use cases. This expansion could extend to areas such as mortgages, auto loans and small business financing, according to analysts.
However, pressure remains on some parts of decentralized finance. Radiant Capital announced earlier this month that it would phase out its operations, stating that it was unable to replace the lost funds and provide new capital following the $50 million exploit in 2024.
